Will Checking My Rate Affect My Credit Score?

When it comes to understanding your credit score, many people often feel a bit anxious about how checking rates might impact it. If you’re considering a loan, you might be wondering, “Will checking my rate affect my credit score?” Let’s break it down in simple terms, so you can feel confident about exploring your options with Nectar Money.

Understanding Credit Checks: Soft vs. Hard Inquiries

First, it’s important to know that there are two types of credit checks: soft inquiries and hard inquiries.

Soft Inquiries: These checks happen when you or a lender reviews your credit report for informational purposes. For example, when you use Nectar’s online quote tool to see your personalised rate, a soft inquiry is performed. The great news? Soft inquiries do not affect your credit score at all. They are simply a way for you to get an idea of what you might qualify for without any negative impact.

Hard Inquiries: On the other hand, hard inquiries occur when you apply for credit and a lender reviews your credit report as part of their decision-making process. This typically happens when you decide to move forward with a loan application. Hard inquiries can have a small, temporary impact on your credit score, and they will remain on your credit file for up to five years.

How Do They Show Up on Your Credit File?

In New Zealand, your credit file will clearly indicate whether a check was a soft or hard inquiry. Soft inquiries are not visible to lenders, so they won’t see them when you apply for credit. Hard inquiries, however, are visible and can be seen by potential lenders when they assess your creditworthiness.

Why Multiple Hard Checks Can Be a Problem

While it’s normal to shop around for the best rates, multiple hard inquiries in a short period can signal to lenders that you might be in financial distress or taking on too much debt. This can lead to a lower credit score and make it harder to secure future credit. It’s generally advisable to limit hard inquiries to avoid any negative impact on your credit profile.

No Need to Worry with Nectar

Now, let’s get back to your original question: will checking your rate with Nectar affect your credit score? The answer is a resounding no! When you use our online quote tool, you can see your personalised rate between 9.95% and 29.95%, and a possible limit between $2,000 and $50,000 without any concern for your credit score. This means you can explore your options freely and responsibly.

Responsible Borrowing is Key

At Nectar Money, we believe in responsible borrowing. Understanding your financial situation and knowing what you can afford is crucial before taking on any debt. Our online quote tool helps you get an idea of what you might be eligible for without the pressure of a hard inquiry. This way, you can make informed decisions that align with your financial goals.

Conclusion

In summary, checking your rate with Nectar is a safe and smart way to explore your borrowing options without affecting your credit score. Remember, a soft inquiry won’t hurt your score, while a hard inquiry only happens if you decide to go ahead with a loan. So, take a deep breath, use our quote tool, and start your journey towards responsible borrowing today!

If you have any more questions about credit scores or how to manage your finances, don’t hesitate to reach out to us. We’re here to help you navigate your financial journey with confidence!